State of the System Address Prepared by Board of Governors Chair

News Release: Florida Board of Governors

Below is the State of the System address as prepared for delivery by Board of Governors Chair Mori Hosseini.

State of the System
Mori Hosseini
January 16, 2014

As I enter my term as chair of the Board, I want to begin by saying what a privilege it is to serve the State University System of Florida—and what an honor it is to work with the members of this Board. Each of you has demonstrated a deep commitment to higher education and the state of Florida by volunteering on this Board. I look forward to continuing to work over the next two years on making our System the best System in the country.

I am fortunate to share that work not only with the members of this Board but also with Chancellor Criser. Our new Chancellor understands the challenges that our System and the State of Florida face. He will effectively advocate for our System; he will carry our message to our State’s leadership and fight for our priorities. In his brief remarks at our November meeting, Chancellor Criser talked about our Board ensuring that the students, families, and citizens of Florida know that an investment in our higher education system is the best investment that can be made with public or private dollars.

Now you know that Chancellor Criser and I both started at the beginning of January, so we’ve only been at these new jobs for a couple of weeks. We thought that we would share with you pictures from each of our first day on the job. Here’s what I looked like on my first day as chair [Show cartoon with person looking frantic and papers flying]. If you think that’s bad, here’s what Chancellor Criser looked like on his first day. 

[Show cartoon with person under the desk].

In all seriousness, higher education in Florida is at a critical time. We are on the cusp of greatness….and this Board is prepared to ascend to greatness.

This Board has worked hard over the past few years, and our efforts have paid off.

The House, the Senate, and the Governor all trust our Board and our System to provide a high-quality, affordable education. This Board stands ready to move that good work forward.

Today, I will lay out a blueprint for how this Board will be laser-focused over the next two years. Laser-focused on three critical areas: (1) quality, (2) funding, and (3) System synergy—which is working together to create the best possible system of higher education.

In the area of quality, the Board of Governors must continue to lead…and to lead with focus. Our System has the future of the students—and in many ways of the State—in our hands. Our work will set the future for higher education in this great State, and that is a big responsibility. We must focus on what is good for the future of Florida—an educated and skilled workforce that will create more high-paying jobs is good for Florida. We must focus on attracting companies to Florida—companies that are looking for that educated, skilled workforce. We will build the 21st century Florida—a Florida with the most educated work force in the country.

We can harness the entrepreneurship that already exists in the System.

Universities have always been incubators of new knowledge—that’s the reason that businesses develop around universities. Just look at Stanford, MIT, Harvard, and the Research Triangle in North Carolina. Companies like Cisco go to North Carolina to be close to their great universities.

I want businesses to think about Florida’s universities in the same way. I want companies across the nation and the world to place Florida at the top of their list of places to create jobs.

Our universities already produce some unbelievable results. We are a good return on the State’s investment. For example, we rank 5th in the country in bringing in critical research dollars.

Our System contributes $1.8 billion in research dollars to the State—the University of Florida led with $697 million, and the University of South Florida is gaining ground at over $451 million. Our researchers use these dollars to tackle the critical issues facing the world developing new medicines and new technologies lead the list.

Sixty percent of those dollars—more than $1billion—comes from private contracts and contracts with the National Institutes of Health, the Department of Defense, the National Science Foundation and other federal agencies. That’s a good return on investment.

Our universities have been awarded more patents in the past five years than anyone else in Florida. We were awarded 937 patents.

Our closest competitor was Siemens Energy—and they were only awarded 356 patents during that five-year span. Another good return on investment.

Since 2003, the state has invested $84.5 million in 11 centers of excellence located in our System. These centers have created jobs, collaborated with private industry, and produced $467 million in competitive grants—that’s a collective return on investment of $5.52 for every state dollar invested. The 495 institutes and centers conducting research in our System average a $4.85 return on investment for every state dollar invested, proving again that we are a good return on investment.

Look at the University of Florida. Congratulations are in order to Dr. Machen for raising $1.7 billion in five years for his university. He also recently announced that he is looking to raise another $800 million for the pre-eminence program over 10 years. And those my friends are a great return on investment. But, we can still get better. And we must.

This Board will partner with the universities to hold the System accountable for creating a high-quality educational experience. This Board will hold the universities accountable—and we will hold ourselves accountable.

We have already done great work in the area of accountability. Our strong three-pronged accountability system—

• our 2025 Strategic Plan,
• our Annual Accountability Reports, and
• our university work plans—

focuses on measures critical to improving Florida: operational efficiency, return on investment and academic quality. That’s why we are recognized nationally as a leader for our accountability work.

Our accountability report has shown us areas where the System excels. For instance, our System, compared to other systems, does an incredible job of getting students out of college in six years. And we continue to improve—graduating more students sooner—students who can go out and contribute to Florida’s economy.

Our latest data show that six-year graduation rates are up for all types of students— first-time-in-college and transfer students alike. In fact, we rank third among the 10 largest public university systems on our FTIC six-year graduation rate at 68 percent. And over the last four years, this rate went up by 4 percent. Clearly we are heading in the right direction.

That said, 32 percent of our FTIC students do not graduate in six years. That does not tell the whole story. Six-year graduation rates in our System range from a high of 86 percent at UF to a low of 39 percent at FAMU and 40 percent at FAU. That is unacceptable. Just think what our overall system six-year graduation rate could be if the universities with the lowest graduation rates increased their graduation rate. Think about how much better we can be. Wouldn’t it be great to be ranked first in the U.S.?

Who said that we should only pay attention to six-year graduation rates? What happened to graduating in four years? Most parents expect their children to graduate in four years! Why is our current four-year graduation rate for the system 42 percent? Four-year graduation rates range from a high of 66 percent at UF to a low of 8 percent. That is completely unacceptable and obviously we have work to do here, too.

I also want this Board to do its due diligence. I want the Audit and Compliance Committee to take on new responsibilities. They will be the Board’s vehicle for ensuring that the Board has undertaken its due diligence on the accuracy of data, especially data related to performance funding.

I want this Board and its committees to be held accountable, and that’s us! I expect each of the committees to come before the Board in March with a two-year plan outlining how that committee expects to contribute to this blueprint. Only by holding our System and ourselves accountable will we be able to succeed for our students and our State.

We owe them our very best.

Now I want to turn to funding. Our Board has developed a performance funding model that will incentivize quality by assessing items like retention rates, graduation rates, and post-graduation success as well as providing university-specific metrics targeted to each institution’s distinct mission.

We are fortunate to have leaders in this State who are supportive of our System and who care about the students. We understand their goals for our System. We want to be affordable, but we also want to meet the needs of our students—to provide them with the best education possible so that they can be productive citizens with good jobs. We know that we can rely upon the Governor, the Senate, and the House to support our System in achieving these goals by providing our universities with adequate funding for operations and facilities. The Governor and the Legislature prudently took $300 million from us when the economy was in dire straits. They had to balance the budget like any other business in the state. Now that the economy is growing again and unemployment is down, we need the State to fund us.

We desperately need funding for our 3-2-1 plan for facilities. What is the 3-2-1 plan? Very simple. We need $321 million for facilities—that’s the 3-2-1 plan. The 3-2-1 plan does not include a penny for new construction.

We need $87 million for maintenance, $189 million for completion, and $45 million for renovation. The 3-2-1 plan supports facilities that the Legislature has already supported with partial funding. Our Board is focused on completing these crucial projects.

Compared to other Systems across the country, Florida invests relatively little in facilities. For instance, the New York System has spent $550 million for the past five years on maintenance alone. Texas spent $475 million on facilities for the University of Texas and Texas A&M systems. The University of California System issued $860 million in century bonds in 2012—topping MIT’s record investment of $750 million in its facilities.

Our 3-2-1 plan will be our countdown for success. This Board is not just asking for money.

We are looking for efficiencies and demanding collaboration. Our universities have taken up this challenge and made difficult choices to close 197 low-performing programs since 2008. Our two pre-eminent universities are leading the way in this effort. Florida State has terminated 55 programs since 2008, 36 of which were terminated in the Spring of 2013, and the University of Florida has terminated 30 programs. And the universities continued to look for efficiencies even after the economic picture started to improve.

I am proud of the universities for focusing on these efficiencies. FSU is receiving national recognition for its focus on balancing quality with efficiency. In fact, it was recently named as the “most efficient high-quality university in the country” by U.S News and World Report – for the second year in a row. Thank you Dr. Barron.

Our universities are also working together better than ever before.

As just one example, I recently learned about a new initiative from presidents Rosenberg, Hitt, and Genshaft. FIU, UCF, and USF are building a consortium dedicated to finding the best ways to collectively serve their unique student populations. This partnership among our state’s three largest metropolitan research universities will ensure access to education that leads to productive jobs by maximizing the resources available in Florida’s largest metropolitan centers.

I also want our System to collaborate with the other education sectors. I want to build on the conversations from the last two Academic and Student Affairs Committee meetings between our System and the Florida College System. I am relying on that committee’s Chair Norm Tripp and Vice Chair Wendy Link to ensure that this State’s 2+2 System remains the envy of the nation. Thank you Dr. Hitt for having the best 2 + 2 program in our system, called Direct Connect.

I am also appointing Wendy Link to the Higher Education Coordinating Council. She will serve as our “link” not only to the Florida College System but also to the K-12 sector and the independent colleges in Florida.

I created an Innovation and Online Committee to look at innovations across the country and ensure that our institutions are at the forefront of new technologies. This Committee is chaired by Ned Lautenbach and held its first meeting yesterday. I expect that committee to act quickly—to assess the potential of new innovations and online learning as well as seek out existing best practices. Most importantly, this Committee will spur new thinking and take the System to the next level of innovation.

Next I want to talk about System synergy—or System teamwork. At the Trustee Summit in November, I talked a lot about creating System synergy, and I want to make that synergy a focus for the Board of Governors, the boards of trustees and the universities. Our Board must collaborate with the boards of trustees to steer higher education policy for the State. We must continue to carefully select only the best candidates for Trustee positions and then strengthen our relationships with the local boards of trustees. Together, we can create the best System of higher education in the country.

We must, however, have synergy within the System to succeed. Our Board shares responsibility for System governance with the university boards of trustees. As we continuously refine the powers and duties of the boards of trustees, we develop our relationship with the members of the university boards. Chair Colson frequently said that many decisions can only be made by the university Boards of Trustees, and I agree with him completely. This Board trusts each university board of trustees to carry out the responsibilities set out for it in the Constitution—and to honor the trust placed in it by the citizens of Florida, the Governor, and our Board.

Two of the major responsibilities of the Board of Governors are to define the distinctive mission of each university and to ensure the well-planned coordination and operation of the State University System. To do this, we need to work even more closely with each university’s board of trustees. I am launching a special initiative and calling upon each university’s board of trustees to create a special committee to conduct a stress test of the university’s operations.

Let me tell you what I mean by a stress test. The goal of the stress test is to review whether the university is financially resilient. We are asking the boards of trustees to conduct a stress test to diagnose how well their institutions are likely to perform in today’s challenging environment. The trustees will review every program and every degree to see if students graduate on time without excess hours and get jobs. They will determine whether programs whose students do not graduate on time and get jobs should be closed.

We have recently come through some difficult years because of the economy where we have all had to make some tough choices and decisions. How will institutions react if funding decreases dramatically once again? How can we be assured that our institutions can weather stressful conditions? What strategies would they employ to manage additional budget reductions? …and what would be the likely impacts and outputs?

Over the course of the next few months, we will be communicating with the boards of trustees about the conditions of the “stress test” that we want you to conduct on your university. We expect that members of the Board of Governors and our staff will have conversations with boards of trustees and campus leadership during this exercise. We will be asking boards of trustees to report the results of the stress test to the Board of Governors in Fall 2014. I want to be clear that this work will be done by the trustees themselves—it will be hard work, but it will result in a better System.

Our Board will no longer accept low graduation rates, high excess hours, or degrees that don’t create jobs or address workforce needs. Our Board will continue to demonstrate its ability to lead the System as we advance into the 21st century. We will continue to improve. Not only do I want our System to be the best System in the country, I want our System to be one of the best Systems in the world.

Our System has been changing, and we have worked hard on improving over the past few years. We have made great strides. As the American Council of Trustees and Alumni said, “Florida is rising”. We, however, have a long way to go. As I take over the reins, I want each of you to be ready to dig in and prepare for some hard work. We owe nothing less to the students, families, and taxpayers of our great state.

Thank you.